With PC numbers falling and mobile device sales exploding, Intel is losing its dominant position in the semiconductor industry. More efficient processors based on ARM technology are the standard in the mobile world. And now, ARM chip makers are about to make a major new move into another Intel bastion, server farms.

Wired is reporting that a research collaboration between ARM, HP and Facebook has produced a new system-on-chip architecture that combines low energy requirements with purpose-built processing capability that’s optimised to run data center servers. It’s built around Memcached technology, an open source software platform that speeds up servers by holding critical data at the ready in fast random access memory, so it doesn’t have to be retrieved from slower disks and databases.

ARM chips are already finding a home in data centers, where – like the mobile market – energy efficiency is the top priority, and acceleration technology can make specialised applications run even faster than on powerful general purpose Intel processors.

Intel has struggled to find a place in the mobile sector. Earlier this year, it introduced a low end version of its Atom chip that’s intended to support Android phones in price conscious developing markets, and it’s pushing high end chips for its Window-based Ultrabook initiative. But for data centers and the mass smart phone market alike, the big chips burn too much electricity and the Atoms don’t have enough power to do the job.

Krzanich has to lead Intel into the mobile middle ground that ARM dominates. Or he will be left standing on the deck of a sinking PC market.